Modvat credit on customer's copy of SAIL challan remains valid where departmental instructions recognise it as acceptable.

Modvat credit under Rule 57G was allowed on the duplicate or customer's copy of a challan issued by SAIL because departmental instructions and a trade notice specifically recognised that document as valid. Although the rule was read as requiring the original duty-paying document, the administrative relaxation for SAIL challans meant credit could not be denied merely because the original challan was retained by SAIL and not given to the customer. The operative principle is that a recognised valid duty document under departmental instructions can support credit notwithstanding the absence of the original.

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Issues: Whether Modvat credit could be availed on the basis of the duplicate or customer's copy of the challan issued by SAIL under Rule 57G.

Analysis: Sub-rules (2) and (4) of Rule 57G were read together to contend that credit could be taken only on the original duty paying document. However, the credit in question was permitted by the trade notice and the Board's instructions specifically for challans issued by SAIL. The record showed that SAIL did not hand over the original challan to the customer and retained it, while issuing the customer's copy. In that setting, the document treated as valid by the departmental instructions could not be confined to the original alone, and the credit was taken on a document recognised as valid by the administrative relaxation.

Conclusion: Credit on the duplicate or customer's copy of the challan was valid, and the appeal failed.

Ratio Decidendi: Where departmental instructions relax the usual requirement under Rule 57G and recognise a customer's copy of a duty-related challan as valid, Modvat credit cannot be denied merely because the original challan was not available to the assessee.

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